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Webinar: Segmenting the Market to Find Areas of
Opportunity
August 21, 2013
Today’s Speakers
Marty Gilbert
President
Growth Initiatives LLC
www.growthinit.com
847.732.7400
Bob Sherlock
President
Mar...
Agenda
• Segmenting your market ‒ Why
• Segmenting your market ‒ How
– How do you determine the size of a market segment?
...
What is Market Segmentation?
Aggregating prospects into groups that share common needs and
behaviors.
Segmenting enables c...
Why Segment Your Markets?
• Pick winnable battles
• Your messaging will resonate better
• Focus sales effort on customers ...
Different Ways to Segment the Market
• Demographics
– B2B
– B2C
• Needs / preferences
• Purchase process / buying behavior...
Looking for Insights
• Beyond “who” and “what,”
look into “WHY”
• Value drivers
• Use cases
• Adoption patterns
• Price se...
The Market Segmentation Process
Total Market Size
Market Segmentation Size
Customer Pain Point by Segment
Product Value Pr...
Ways to Determine Market Size
• Published information is often limited
• You’ll have to estimate, using assumptions and/or...
How to Determine Market Segment Size
Example #1
Market Size Estimate: Enterprise software licenses for
salespeople in firm...
How to Determine Market Segment Size
Example #1
Market Size Estimate: Mobility software application for
hospital physician...
Vertical and Horizontal Segments
Operations
Sales
Marketing
Finance
CEO/COO/Pres
Healthcare Manuf Education Telecom Financ...
Vertical Market Pain Points
• Excessive operational costs that are reducing profitability
• Failure to differentiate the v...
Horizontal Market Pain Points
• CEO
– Growth opportunities in 2-3 years
– Key alliances that extend the product into new m...
Product Value Proposition
• A value proposition must solve a problem
– The more urgent the problem, the valuable the solut...
Market Segment Prioritization
• Size of market opportunity
• Market dynamics… fast-changing? Short product shelf life?
• E...
Segment Prioritization Example
Wtd Wtd Wtd Wtd
Criteria Score Wtg Score Score Wtg Score Score Wtg Score Score Wtg Score
Pr...
How Segmentation is a Feeding Ground
MARKET
SEGMENTATION
Product Development
• Drives feature set
• Reduced over-design
• ...
What Comes After Segmentation?
Business case justification
Product development Sales tool kit development
Product launch
C...
What Can You Expect?
Market segmentation:
• Provides greater focus on your product, sales and marketing
efforts.
• Creates...
Thank You!
21
Marty Gilbert
Growth Initiatives LLC
www.growthinit.com • 847.732.7400 • mgilbert@growthinit.com
Bob Sherloc...
Your IT Industry Association
Get this recorded webinar at www.comptia.org:
Segmenting the Market to Find Areas of Opportun...
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Segmenting the Market to Find Areas of Opportunity

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In a webinar presented by Marty Gilbert, president, Growth Initiatives LLC, and Bob Sherlock, president, Marketwerks, hear about one of the most effective paths to accelerating a company’s revenue growth. Target your sales and marketing efforts to very specific audiences. Insightfully segmenting of the potential market can provide the launching pad for a successful sales plan.

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  • From a strategy standpoint, segmentation allows you to pick winnable battles – going after customers with a service offer and message that better addresses their needs and wants than staying with what they’re doing now, or choosing a competitor.From a marketing communications standpoint, having well-defined segments means:More targeted marketing messagesCampaigns that resonate with buyersIdentifies potential early adoptersFor sales, identifying those customers that are a better fit with your product:Increases the conversion rateShortens the sales cycleProduces bigger dealsPresents greater customer loyaltyBetter response rates, shorter conversion cycles, better ROIAnd where using channel partners to reach end users makes sense, segmentation lets you pick the right channels to for various groups of end users.
  • DemographicsB2B demographicsGeographyIndustry or SIC codesCompany size: revenues or # employeesTitlesB2C demographicsAge, gender, race, ethnicityGeographyHousehold incomeInterests/hobbiesPolitical preferenceNeeds and preferencesBuying behavior and buying decision processPrice sensitivity
  • Move past “who” or “what” and into “WHY”Why companies are buying & what problems they are trying to solveIdentify motivational attributes (e.g. pain points, adoption patterns) Value drivers Cost reduction?Increased revenues and margins?Asset reduction or protection?Risk management?Use casesAdoption patternsInnovators, early adopters, early majority, late majority, laggardsPrice sensitivity
  • Transcript of "Segmenting the Market to Find Areas of Opportunity"

    1. 1. Webinar: Segmenting the Market to Find Areas of Opportunity August 21, 2013
    2. 2. Today’s Speakers Marty Gilbert President Growth Initiatives LLC www.growthinit.com 847.732.7400 Bob Sherlock President Marketwerks Inc. www.marketwerks.com 847.382.6210
    3. 3. Agenda • Segmenting your market ‒ Why • Segmenting your market ‒ How – How do you determine the size of a market segment? – How do you prioritize one segment opportunity over another? – How is market segmentation a feeding ground for sales, marketing and product development? • What do you do after the segmentation process is completed? • What results can you expect? 3
    4. 4. What is Market Segmentation? Aggregating prospects into groups that share common needs and behaviors. Segmenting enables companies to target different categories of consumers or businesses who perceive the value of certain products and services differently from one another. 4
    5. 5. Why Segment Your Markets? • Pick winnable battles • Your messaging will resonate better • Focus sales effort on customers that are a better fit with you and what you offer • Pick right channel partners Enables you to tailor solutions and communications 5
    6. 6. Different Ways to Segment the Market • Demographics – B2B – B2C • Needs / preferences • Purchase process / buying behavior • Price sensitivity 6
    7. 7. Looking for Insights • Beyond “who” and “what,” look into “WHY” • Value drivers • Use cases • Adoption patterns • Price sensitivity 7
    8. 8. The Market Segmentation Process Total Market Size Market Segmentation Size Customer Pain Point by Segment Product Value Proposition Market Segment Prioritization -- Market size -- Ease of entry -- Unmet needs -- Competitive positioning 8
    9. 9. Ways to Determine Market Size • Published information is often limited • You’ll have to estimate, using assumptions and/or correlations. • Let’s go through two examples: – Enterprise software licenses for sales teams in firms with > 100 employees – Software application for hospital physicians 9
    10. 10. How to Determine Market Segment Size Example #1 Market Size Estimate: Enterprise software licenses for salespeople in firms with greater than 100 employees. Avg # of # of % # of US Market Criteria Employees Employees Salespeople Salespeople Number of employer firms 5,930,000 Firms with 100-499 employees 90,300 250 22,575,000 30% 6,772,500 Firms with 500+ employees 1,850 2,000 3,700,000 20% 740,000 Total firms with >100 employees 92,150 26,275,000 7,512,500 Avg sell price (ASP)/unit $150 TOTAL MARKET $ $1,126,875,000 TOTAL MARKET UNITS 7,512,500 Denotes a variable assumption 10
    11. 11. How to Determine Market Segment Size Example #1 Market Size Estimate: Mobility software application for hospital physicians Number of physicians 850,000 % of physicians with smartphones 90% # of physicians with smartphones 765,000 % of physicians with tablets 40% # of physicians with tablets 340,000 TOTAL MARKET UNITS 1,105,000 Avg sell price (ASP)/unit $200 TOTAL MARKET $ $221,000,000 Denotes a variable assumption 11
    12. 12. Vertical and Horizontal Segments Operations Sales Marketing Finance CEO/COO/Pres Healthcare Manuf Education Telecom Financial Svs Transport Product solutions may need to resonate with specific industries and specific individuals within each company. = Decision-maker M A R K E T S RESPONSIBILITIES 12
    13. 13. Vertical Market Pain Points • Excessive operational costs that are reducing profitability • Failure to differentiate the value proposition • Lack of process - inefficient operations • Inability to launch new products in a timely manner • Price erosion due to product commoditization • Difficulty in determining investment priorities • Unmotivated channel partners • Stagnant revenue growth • Poor quality 13
    14. 14. Horizontal Market Pain Points • CEO – Growth opportunities in 2-3 years – Key alliances that extend the product into new markets • COO – Cost containment and reductions over time – Quality improvements • CFO – Greater negotiating leverage with vendors – Risk management • Sales – Increasing the funnel by broadening the product line – Getting bigger deals and shortening the sales cycle 14
    15. 15. Product Value Proposition • A value proposition must solve a problem – The more urgent the problem, the valuable the solution • A strong value proposition statement must contain: – Capability, impact, proof and cost • Value = Benefits – Cost • Demonstrate value / ROI Q1 Q2 Q3 Q4 Q1 Q2 Q3 Cumulative Cost $ Incremental Benefit 15
    16. 16. Market Segment Prioritization • Size of market opportunity • Market dynamics… fast-changing? Short product shelf life? • Ease of entry • Value of the your selling proposition • Product differentiation & competitive positioning • Sales cycle length • One-time sales vs. recurring revenue • Customer lifecycle value • Number of influencers & length of the decision-making process • Average order sizes… large vs. many small orders (COGS) 16
    17. 17. Segment Prioritization Example Wtd Wtd Wtd Wtd Criteria Score Wtg Score Score Wtg Score Score Wtg Score Score Wtg Score Product differentiation 5 10 50 9 10 90 4 10 40 8 10 80 Product value proposition 4 9 36 8 9 72 2 9 18 4 9 36 Low barriers to entry 8 8 64 1 8 8 7 8 56 2 8 16 Market need urgency 2 7 14 3 7 21 3 7 21 6 7 42 Little competition 9 6 54 5 6 30 8 6 48 1 6 6 Price insensitivity 7 5 35 10 5 50 1 5 5 10 5 50 Adoption leader 1 4 4 6 4 24 9 4 36 7 4 28 Market size 10 3 30 7 3 21 10 3 30 9 3 27 Existing channel to mkt 6 2 12 2 2 4 5 2 10 3 2 6 Growth rate 3 1 3 4 1 4 6 1 6 5 1 5 302 324 270 296 HEALTHCARE FINANCIAL SVS MANUF EDUCATION 17
    18. 18. How Segmentation is a Feeding Ground MARKET SEGMENTATION Product Development • Drives feature set • Reduced over-design • Common platform w/ modular add-ons Marketing • Communicate value prop • Competitive positioning • Branding • Lead generation programs Sales • ROI models • Case studies • Customer testimonials Narrowing the field through segmentation sharpens the focus. 18
    19. 19. What Comes After Segmentation? Business case justification Product development Sales tool kit development Product launch Customize the messaging Develop segmented database Vertical market nurture campaigns Track customer engagement, analytics & leads Modify marketing messages as needed Collateral, case studies, ROI models, events sales training, vertical mkts, webinars, PR 19
    20. 20. What Can You Expect? Market segmentation: • Provides greater focus on your product, sales and marketing efforts. • Creates strong entry into a select group of markets which increases the odds for business success. • Allows for customized messaging. • Establishes you as a problem-solver. • Enables you to prioritize what efforts to pursue. 20
    21. 21. Thank You! 21 Marty Gilbert Growth Initiatives LLC www.growthinit.com • 847.732.7400 • mgilbert@growthinit.com Bob Sherlock Marketwerks Inc. www.marketwerks.com • 847.382.6210 • rsherlock@marketwerks.com Please type questions into the Q&A panel in the bottom right hand corner of your screen 21
    22. 22. Your IT Industry Association Get this recorded webinar at www.comptia.org: Segmenting the Market to Find Areas of Opportunity Register for future webinars at: www.comptia.org/events/webinars
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